The Vietnamese taxi market had registered USD 368.56 million in 2017 and is expected to register a CAGR of 14.86% during the forecast period. The demand for ride-hailing services through technology application has been increasing continuously, after the implementation of pilot program Decision No. 24/QD-BGTVT, in January 2016, by Ministry of Transport (MoT) in Vietnam. Reduced taxi fare and ease of booking through mobile app are the major factors that driven the modern taxi service to capture a major share of 56% of the Vietnamese taxi market in 2017.
However, still vehicle booking through phone calling and hailing on streets, continues to operate as a major service among popular brands of taxi firms, like Mai Linh, Vinasun, Vinataxi, TaxiGroup, Hoang Long etc., and thus, the traditional taxi service had acquired 44% of the Vietnamese taxi market in 2017.
Increasing Passenger Traffic us Driving the Ride-Hailing Industry
Post-2016, the passengers in the country are made available with numerous ride-hailing and sharing services. With the entry of multinational players, like Uber and Grab till 2017, passengers have shifted their commuting preference from regular taxi service due to competitive pricing strategies implemented by the aforementioned MNCs. In 2017, the traditional taxi companies were charging approximately USD 7.5 to USD 8.00 per trip (maximum of 30-34 km) from major cities to International Airports while the MNCs, like Uber and Grab were offering the same with an additional discount ranging between USD 5.5 to USD 6.3 per trip (maximum of 30-34 km). Additionally, a spike in the number of tourists in the country has also accounted for a significant increase in taxi industry revenue. According to the General Statistics Office, in 2017, the country observed a record of 13 million foreign visitors, a 30% increase compared to the previous year.
In 2015, passengers utilizing the taxi service in the country were estimated to be more than 26% and the number is anticipated to grow significantly over the forecast period owing to the entry of numerous foreign players, and the traditional taxi companies enhancing the options to be provided in mobile applications to retain their respective market share in the highly competitive market. Vietnam houses for more than 200 taxi companies, of which Vinasun and Mai Linh are the most preferred traditional taxi services by passengers in Ho Chi Minh and Hanoi Cities till 2016 due to safety and reliability. However, in modern taxi category i.e., booking through a mobile application, Uber and Grab have gained immense traction from the passengers with 27% and 31% popularity in booking respectively, in 2017. As more than 65% of the passengers consider taxi service as a convenient and quick commuting feature, the market has immense potential over the forecast period. As the penetration rate of domestic as well international passengers will increase by multiple folds till 2023, the demand for taxi service both traditional and modern categories are about ramp up from channels, like hotels, tourist destinations, airport trips, etc., In addition, as bike taxi is more popular in Vietnam than other types, this service (bike taxi) is about to gain traction from shorter distance travelers. With the existing traffic congestion situation in the country, the market is anticipated to be driven by passengers switching from own transport to taxi-based service.
Traditional Taxi Service Accounted for Second Largest Share In The Market
The traditional taxi service in the Vietnamese taxi market is anticipated to reach USD 249.33 million by 2023.
With the presence of more than 200 taxi firms across the country, nearly 65% of the taxi firms still majorly receive taxi bookings through traditional methods, such as hailing a taxi from the street or phone booking. For instance, Vinataxi has started app-based taxi service in October, 2017, and majority of the taxi bookings (nearly 70%) registered through phone bookings from the date of its app launch to till date due to its less brand awareness compared to Grab, Uber, Mai Linh, and Vinasun, and lack of marketing and promotional programs. Entering into the modern taxi service has become the primary focus of traditional taxi firms as the revenue share of the traditional taxi market has been declining at the rate of more than 30-40% each year after the entry of Grab and Uber in 2014.
Few major factors that resulted in the downfall of the traditional taxi market included were increased taxi scams (fake brand taxi services offered in the country, especially at tourist locations) and high taxi fares. For instance, traditional motorbike taxi fare charged at VND 20,000 per kilometer or VND 50,000 for 6 kilometers. While, UberMoto charged at VND 10,000 for first two kilometers, and VND 3,700 for the next kilometers. Comparing the above motorbike taxi fares, modern motorbike taxi service charged 50% less taxi fare to that of the traditional motorbike taxi service. Similarly, other vehicle types under modern taxi service, like taxi cars charged at half the taxi fare of the traditional taxi service. Thus, the reduced taxi fare has significantly attracted customers in Vietnam resulting in drastic demand for app-based taxis, like Grab and Uber.
Key Developments in the Vietnam Taxi Market
Apr 2018 - Uber officially ceased operations in Southeast Asia, allegedly leaving behind in Vietnam USD 2.3 million (VND53 billion) in tax debt.
Dec 2017 - Vinasun Corp. opened its branches in Quang Nam and Phu Yen provinces to serve tourists and domestic passengers. At Quang Nam branch, more than 30 taxis (4-seater and 7-seater) have been deployed by the company.
Vietnam Taxi Market Players: Vinasun Corp., Mai Linh Corp., Grab, Vinataxi, Taxi Group, Hoang Long, Thang Long, and Thu do among other
Reasons to Purchase Vietnam Taxi Market Report
To study the current and future market outlook in the country
Analyzing various perspectives of the market with the help of Porter’s five forces analysis
Detailed analysis of the segment that is expected to dominate the market
Cities that are expected to witness the fastest growth during the forecast period
Identify the latest developments, market shares and strategies employed by the major market players.
3 months analyst support along with the Market Estimate sheet in excel.
Customization of Vietnam Taxi Market
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1.1 Study Deliverables
1.2 General Study Assumptions
2. Research Methodology
2.2 Analysis Methodology
2.3 Study Phases
3. Market Insights
3.1 Executive Summary
3.2 Current Market Scenario
3.3 Industry Attractiveness - Porter's Five Force Analysis
3.3.1 Bargaining Power of Suppliers
3.3.2 Bargaining Power of Buyers
3.3.3 Threat of New Entrants
3.3.4 Threat of Substitute Products and Services
3.3.5 Degree of Competition
4. Market Dynamics
4.1.1 Increasing Passenger Traffic is driving the Ride-Hailing Industry
4.2.1 Falling Demand for Offline/Traditional Ride-Hailing Services
4.2.2 Vietnam Government Stopped Licensing New Taxis
4.3.1 New Ride-Hailing Platforms Entering into the Country
5. Market Segmentation and Analysis (Market Size, Growth, and Forecast)
5.1 By Service
5.1.1 Traditional Taxi Service (Offline Hailing)
5.1.2 Modern Taxi Service (Online Hailing and Sharing)
5.2 By Vehicle Type
5.2.3 Other (Van and Bus)
5.3 By City
5.3.2 Ho Chi Minh City
6. Competitive Landscape
6.2 Market Share Analysis
7. Company Profiles
7.1 Taxi Brands
7.1.1 Mai Linh Group JSC
7.1.2 Vinasun Corp.
7.1.4 Hoang Long
7.2 Online Platforms (Applications)
7.2.1 Uber Technologies Inc.
7.2.2 GrabTaxi Holdings PTE Ltd.
7.2.3 Kyyti Group
7.2.7 Taxi Navi